Privity in English law

Privity is a doctrine in English contract law that covers the relationship between parties to a contract and other parties or agents. At its most basic level, the rule is that a contract can neither give rights to, nor impose obligations on, anyone who is not a party to the original agreement, i.e. a "third party". Historically, third parties could enforce the terms of a contract, as evidenced in Provender v Wood, but the law changed in a series of cases in the 19th and early 20th centuries, the most well known of which are Tweddle v Atkinson in 1861 and Dunlop Pneumatic Tyre v Selfridge and Co Ltd in 1915.

The doctrine was widely seen as unfair, for various reasons - it made no exception for cases where the parties to a contract obviously intended for it to be enforced by a third party, and it was so inconsistently applied that it provided no solid rule and was therefore "bad" law. The doctrine attracted criticism from figures such as Lord Scarman, Lord Denning, Lord Reid and Arthur Linton Corbin, and as early as 1937 the Law Revision Committee recommended that it should be significantly altered. With the passing of the Contracts (Rights of Third Parties) Act 1999 on 11 November 1999 the doctrine was significantly altered, and it now allows a third party to enforce the terms of a contract if the third party is specifically authorised to do so by the contract or if the contractual terms "purport to confer a benefit" on such third party.

The original doctrine of privity consisted of two rules - first, that a third party may not have obligations imposed by the terms of a contract, and second, that a third party may not benefit from the terms of a contract. The first rule is not something that is contested, while the second was described as "one of the most universally disliked and criticised blots on the legal landscape". The second rule was not originally held to be valid, and in the 17th Century third parties were allowed to enforce terms of a contract that benefited them, as shown in Provender v Wood [1627] Hetley 30, where the judgement stated that "the party to whom the benefit of a promise accrews, may bring his action." The first reversal of this was in Bourne v Mason [1669] 1 Vent., where the Court of King's Bench found that a third party had no rights to enforce a contract that benefited him. This case was quickly reversed, and decisions immediately after Bourne v Mason took the view that third parties could enforce contracts that benefited them.

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